he bill is a companion to legislation introduced by Representative Barney Frank (Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2009) that would license and regulate online gambling, which now has bi-partisan support from 66 co-sponsors. Representative McDermott’s bill includes new provisions that were not in the original version introduced last October.
The revised bill includes four new provisions including a revenue incentive for states and tribes to participate through a 6% tax on gambling deposits that flows to them, which could generate an estimated us$ 30 billion for states on top of the us$ 41 billion in revenues for the federal government.
The bill also includes two new revenue set-asides that would designate 25% of the generated funds for foster kids and 0.5% for historic preservation and the arts, while including tax measures to encourage illegal gambling service providers to operate legally. The bill will also ensure that internet gambling is not part of the current tax exemptions on horses, dogs, and jai-alai.
“Legalizing, regulating and taxing internet gambling just makes sense. Right now, the U.S loses billions of dollars to off-shore gambling and illegal gambling rings because of an unrealistic and virtually unenforceable policy,” said Representative McDermott.
“The current prohibition of online gambling has failed and made countless Americans vulnerable to fraud, identity theft and money laundering. This revised legislation will help States—which are facing budget crises all their own—collect much-needed revenue, and will help provide the foster care system with more resources as well. This legislation will help protect consumers and help both the federal and state governments recoup billions of dollars that now flow offshore.”
McDermott said that banks would also benefit from legalisation and regulation of online gambling as they prepare for an ‘impossible task’ this summer once the UIGEA is enacted, with banks having to certify that every credit card charge made by a consumer is not being used for illegal online gambling.
“Legalisation and regulation of online gambling will take this onerous task out of banks’ hands and prevent them from facing yet another challenge,” concluded McDermott.